On the left, he finds none but floating capital. On the right, the proportion of fixed to that which is floating, is probably five or six to one. On the left, he finds scarcely any circulation; whereas, on the right, circulation is rapid-making demand for most of the physical and mental force that is produced. On the left, he finds barbarism; on the right, civilizationsuch, too, proving to be the result, whether he compares the Highlands with Yorkshire-Auvergne with Normandy - Carolina with Massachusetts - Ireland with France-or Turkey with Northern Germany. § 6. We are told, however, and from high authority, that "it is only by means of saving that fortunes are created or increased" - a distinguished English economist confidently assuring us that "all capital is the product of saving- that is, of abstinence from present consumption for the sake of a future good;" and that, consequently, "the increase of capital must depend upon two things the amount of the fund from which saving can be made, and the strength of the dispositions which prompt to it."* Were this so, it would be to the countries in which saving is most practised, that we should look for the most rapid augmentation of capital; yet is it precisely there that it grows most slowly. The Irish laborer is noted for his saving habits, as are the natives of India and the people of Lapland; yet is it not in those countries that we meet with rapid increase of capital. Looking back in English and Scottish history, we see families everywhere saving a supply of food, because of the great uncertainty attendant upon getting more. In India, sovereigns save large. quantities of money in their treasuries, by way of providing against deficiencies of revenue that may occur. Turning, next, to sacred history, we see saving practised on so large a scale as to provide that a nation might be fed during seven years of scarcity out of seven preceding years of abundance. In all these cases, however, the very fact of saving having been resorted to, is evidence of the absence of that regularity in the supply which is indispensable to the steady and regular motion of the social machine. The Castilian saves his food in a silo; and the wild man of the West deposits his surplus food in a cache, anxious to * J. S. MILL: Principles of Political Economy, book 1, chap. xi. ? 1. provide against deficiencies that may perhaps occur on his next expedition in the same direction. The mistress of the house saves water in a cistern, because of the uncertainty of the supplyceasing, however, to do so, when the river is made to find its way to the ocean through her own and her neighbors' houses. It is where there is least circulation, that saving is most resorted to, and there the waste is greatest. Every act of association is an act of commerce, implying the production and consumption of two services, neither of which would have been produced, had the demand for them not arisen. With every increase in the power to associate, and thus to maintain commerce, the demand tends more and more to become instant after the existence of the power to perform the service power being thus economized. The various faculties of individual men are thus stimulated into action, with constant increase of power over the always gratuitous forces of nature; and it is in the growth of that power we find the wealth of the community of which they are a part. Where saving is most practised, society is stagnant-the faculties remaining latent because of the absence of demand for their employment; as is seen when insecurity produces stoppage of the circulation. All then become anxious to save the waste of labor-power, under such circumstances, becoming almost universal. The circulation becoming again established, capital rapidly accumulates the demand for physical or mental service then following closely upon the production of the power to render it. The faculties that had remained latent are then again stimulated into action every increase in the demand for them being accompanied by increase of the supply, with corresponding increase in the value of man, in his effort to obtain a further mastery over nature, and in the growth of capital. The construction of a railroad brings with it increase of capital -because, by diminishing the waste attendant upon effecting changes of place, it gives value to land. The flour-mill does the same - because, by diminishing the waste attendant upon effecting changes of place and of form, it enables the farmer to grow rich. The woollen-mill causes a large increase of capital, because it enables the neighboring farmers to send their wool and their corn to market, in the form of cloth. The opening of a mine, and the erection of a furnace, give value to the land and labor around them, because they increase the rapidity of circulation, and thus promote economy of human effort. Capital grows in the ratio of the circulation that itself existing in the ratio of the diversity of employments. To the absence of that diversity the waste of capital in Ireland, India, Turkey, and Portugal, is due; and to its presence, and not to saving, is due the rapid increase of capital in England of the past, and Northern Germany of the present. § 7. We are told, however, that India, Ireland, Brazil, the United States, and other countries, are deficient in capital, in default of which it is absurd to attempt to convert their corn and their wool into cloth, or their coal and ore into iron. It is, however, manufactures that cause the growth of capital-facilitating, as they do, the development of the powers of THE MAN, and thus enabling him to combine with his fellow-men for economizing the power resulting from the consumption of capital in the form. of food. Every act of combined action has for its object, and its effect, a saving of human effort, which, itself, is capital. Sometimes, a few individuals combine to drain a piece of land; at others, to dig a well, to construct a mill, or to open a mine; all of which require capital that is to say, the investment of a certain amount of labor, upon the same principle, identically, that the farmer ploughs his land, and sows his seed — calculating upon having it returned, with interest for its use. When Crusoe made his ropeladder, he did so for the reason, that it was better for him at once to expend a few hours, or, in other words, a little capital, than to waste, throughout the year, an hour a day, in climbing the rock under which he had taken up his abode. - 'What," says the author of a small but excellent work, heretofore referred to "" What is the object, what the result sought to be obtained by every advance of capital, for whatsoever purpose? It is, everywhere and always, that of suppressing, by means of a certain quantity of labor once performed, a certain portion of current labor and annual expense that would otherwise reappear periodically and for an indefinite period of time; it is to exonerate, at the cost of a momentary sacrifice, the whole future of production. "Every intervention of capital has the effect of diminishing. daily labor, resulting from the constantly recurring difficulty of an operation: thus, we have here a village situated at the distance of a mile from a river-every time that one of its people has occasion for water, he being required to walk that distance. No capital is expended, but there is a periodical demand for labor carried to its highest point. The inhabitants, at length, conceive the idea of making some earthen or wooden vessels, having done which, they go once a day returning with the day's supply of water. Capital now making its appearance in the once-performed labor of making the vessels, the daily expenditure of human effort is diminished, in the proportion that the one walk to the river bears to the three, four, five, or six, that would otherwise have been required. "Next, some one constructs a cask, and a wagon-attaching to the latter an ass or an ox, and carrying water about the village. Here is a new expenditure of capital, but, in return, there is economy in the daily labor-proved by the fact that the people now buy their water, in place of going to get it. At length, however, an aqueduct is built-requiring an enormous expenditure of capital; but the daily effort that had been needed for obtaining a supply of water is from this time at an end-capital having, so to speak, altogether suppressed labor. "The proof that all these successive interventions of capital have been economies of force, time, and money, is, that all these expenditures have been returned in the value of the water obtained; and that, while casks, wagons, and buildings have been paid for and maintained, the price of water has steadily fallen;" and, as the author of this might well have added, the consumption has so much increased, that a single family now consumes more than, at first, would have supplied the village. * In writing this passage, M. de Fontenay had no reference. whatsoever to the question of protection of the claims of commerce on the one side, or of those of trade on the other; but it is the characteristic of propositions that are true, that they, at all times, and everywhere, prove themselves true. The great object of man being that of acquiring power over nature, the more he * DE FONTENAY: Du Revenu Foncier, p. 63. does so, the less is the value of the commodities he requires, the greater is his own, and the larger becomes his consumption. To attain power, there must be association and combination of effort. The obstacle to association being found in the necessity for effecting changes of place, the more it can be removed, the greater not only is the present power of man, but the greater is his capacity for new and more important efforts. The spring being distant, he calls to his aid, in regular succession, various natural forces-passing from the mere hand to the jug, the cask, and the wagon, with constant decline in the cost and value of the water. When, however, he constructs an aqueduct, and is thus enabled to avail himself of the power of gravitation, value ceases, and water becomes as cheap as air. The Indian path being bad, he determines, once for all, to make a road, the effect of which is soon exhibited in the fact, that he is enabled, once again for all, to make a turnpike; and yet, so greatly are his powers thereby augmented, that we find him again, once for all, investing millions of present labor in constructing a canal — then regarded as the ne plus ultra of improvement. Here again, however, we find it to be only the first step that costs. the economy of labor effected by the canal proving to be so great, that but a trivial portion is required for the construction of a railroad that transports himself and his merchandise at a cost so small, that his land and labor are thereby thrice increased in value. The school-house being distant, his children are obliged either to dispense altogether with education, or to waste most of their time on the road thereto. Seeing himself everywhere surrounded by the materials of which houses are composed, he proposes to his neighbors that they shall, once for all, give their time to the construction of a house thereby enabling themselves to economize the labor of placing their children on the spot at which they are to be instructed; and now instruction so much declines in value, that ten times as many children are enabled to profit by it. The market being distant, he is obliged to incur, daily, the cost of transferring his wool and his corn, to be exchanged for cloth. Looking around him, he sees that nature has furnished him with the same forces, precisely, with those in use among the |
